The Impact of Perceived Greenwashing on Purchase Decisions in Bangladesh: A Moderated Mediation Analysis

Abstract

This study will study the complex psychological and behavioral processes in terms of which perceived greenwashing will have an impact on consumer purchasing decisions in Bangladesh. With environmental degradation taking a critical turn, green marketing has been a very crucial approach that firms have adopted in order to create competitive services but along the same turn, emergence of deceptive practices known collectively as greenwashing has presented a paradoxical issue of a Greenwashing Paradox to the consumer decision-making process. Basing on the Signaling Theory and Attribution Theory, this research forms a synthesized model to examine the role mediating effects of green trust, perceived risk and the moderated effect of environmental knowledge. The sample size consisting of 256 respondents was used, with the main aim of entering the fast-growing young consumer group of the population. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze the conceptual framework, which is the SEMinR package of R version 4.5.1. The empirical results indicate that, although perceived greenwashing causes the reduction of green trust and perception of risk, it does not significantly affect buying behavior, thus embracing the occurrence of Greenwashing Paradox in the local market. The mediation analysis shows that the perceived risk is an essential channel where greenwashing prevents the purchase decision, and green trust does not play an important role in the given connection. Moreover, the findings show that environmental knowledge is a powerful moderator in between perceived risk and purchase decisions to alleviate the adverse effects of the former. The insights also offer the critical practical implications to green marketers and policy makers in the emerging economies of substantive sustainability and open communication coupled with empowering consumers by ensuring that they are environmentally literate to counter the adverse impacts of the perceived deception.